[Federal Register Volume 73, Number 21 (Thursday, January 31, 2008)]
[Notices]
[Pages 5892-5894]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-1731]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57198; File No. SR-NASDAQ-2007-094]
Self-Regulatory Organizations; The NASDAQ Stock Market, LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Regarding Notification Requirements for Issuers Making Distributions to
Shareholders
January 24, 2008.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
[[Page 5893]]
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on November 30, 2007, The NASDAQ Stock Market, LLC (``Nasdaq'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I and II below, which
Items have been substantially prepared by Nasdaq. Nasdaq has designated
the proposed rule change as constituting a ``non-controversial'' rule
change under Rule 19b-4(f)(6) under the Act,\3\ which renders the
proposal effective upon receipt of this filing by the Commission. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Nasdaq proposes a rule change to include in the Nasdaq rule manual
the notification requirements for issuers making distributions to
shareholders.
The text of the proposed rule change is below. Proposed new
language is underlined; proposed deletions are in brackets.\4\
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\4\ Changes are marked to the rule text that appears in the
electronic manual of Nasdaq found at www.complinet.com/nasdaq.
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* * * * *
4310. Listing Requirements for Domestic and Canadian Securities
(a)-(b) No Change.
(c)(1)-(24) No Change.
(c)(25) In the case of any dividend action or action relating to a
stock distribution of a listed stock the issuer shall, no later than 10
calendar days prior to the record date of such action: [[Reserved]]
(i) Notify Nasdaq by filing the appropriate form as designated by
Nasdaq; and
(ii) Provide public notice using a Regulation FD compliant method.
Notice to Nasdaq should be given as soon as possible after
declaration and, in any event, no later than simultaneously with the
public notice.
(c)(26)-(30) No Change.
* * * * *
4320. Listing Requirements for Non-Canadian Foreign Securities and
American Depository Receipts
(a)-(d) No Change.
(e)(1)-(20) No Change.
(e)(21) In the case of any dividend action or action relating to a
stock distribution of a listed stock the issuer shall, no later than 10
calendar days prior to the record date of such action: [[Reserved]]
(i) Notify Nasdaq by filing the appropriate form as designated by
Nasdaq; and
(ii) Provide public notice using a Regulation FD compliant method.
Notice to Nasdaq should be given as soon as possible after
declaration and, in any event, no later than simultaneously with the
public notice.
(e)(22)-(26) No Change.
(f) No Change.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, Nasdaq included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. Nasdaq has prepared summaries, set forth in Sections A,
B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Pursuant to SEC Rule 10b-17,\5\ a national securities exchange may
establish procedures under which an issuer must provide notice to the
exchange no later than 10 calendar days prior to the record date of a
dividend or other distribution in cash or in kind, including a dividend
or distribution of any security. Nasdaq has implemented this
requirement through procedures posted on its Web site at http://
www.nasdaq.com/about/FAQsMarketIntegrity.stm.
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\5\ 17 CFR 240.10b-17.
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Upon receipt of an issuer's notification information regarding an
upcoming distribution to shareholders, and in accordance with Nasdaq
Rule 11140, Nasdaq Corporate Data Operations Staff thereafter
determines the ``ex'' date for the distribution and announces that
information to the marketplace via a Daily List, which is a daily
publication of all newly announced dividends. The information on the
Daily List includes, among other things, the record date, payment date,
payment amount and all new ex date rulings in order to provide the
marketplace with the information necessary to adjust the price of the
security on the ex date to represent the value of the dividend.
The proposed rule text specifically incorporates the 10 day notice
period set forth in SEC Rule 10b-17. Additionally, the proposed rule
language requires that an issuer provide such notice through the use of
appropriate Nasdaq forms and through the use of a Regulation FD
compliant method to help ensure that both Nasdaq and the public are
appropriately alerted in a timely manner as to any upcoming
distributions to shareholders.
Nasdaq believes that adopting a listing standard in this area,
rather than relying on procedures described on a Web site, will provide
greater transparency to issuers and investors and reduce the likelihood
of untimely notification of dividend declarations. Moreover, we note
that both the New York Stock Exchange LLC (``NYSE'') and the American
Stock Exchange, LLC (``Amex'') have each already adopted rules that
implement SEC Rule 10b-17 as to their listed issuers.\6\ Thus, adoption
of a Nasdaq listing standard will provide uniformity throughout the
markets. Nasdaq's proposed rule is consistent in all respects with the
procedures on its Web site.
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\6\ See NYSE Rule 204.12 and Amex Rule 830.
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2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6(b) of the Act \7\ in general and furthers
the objectives of Section 6(b)(5) \8\ in particular in that it is
designed to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanisms of a free and open market and a national market
system and, in general, to protect investors and the public interest.
Untimely notification of dividend declarations may have a negative
impact on the marketplace in the form of a late ex date ruling so it is
in the best interests of the marketplace that Nasdaq reflect its
notification requirements in the Nasdaq manual.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq does not believe that the proposed rule change will result
in any burden on competition that is not
[[Page 5894]]
necessary or appropriate in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments on the proposed rule change were neither solicited
nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) thereunder \10\ because
it does not: (i) Significantly affect the protection of investors or
the public interest; (ii) impose any significant burden on competition;
and (iii) become operative for 30 days after the date of the filing, or
such shorter time as the Commission may designate.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) may not become
operative prior to 30 days after the date of filing unless the
Commission designates a shorter time if such action is consistent with
the protection of investors and the public interest.\11\ Nasdaq has
requested that the Commission waive the 30-day operative delay, which
would make the rule change operative immediately upon filing with the
Commission. The Commission believes waiving the 30-day operative date
is consistent with the protection of investors and the public interest
because the proposed rule change provides greater transparency to
issuers and investors and may reduce the likelihood of untimely
notification of dividend declarations.\12\ For these reasons, the
Commission designates the proposal to be effective and operative upon
filing with the Commission.
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\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires that a self-regulatory organization submit to the
Commission written notice of its intent to file the proposed rule
change, along with a brief description and text of the proposed rule
change, at least five business days prior to the date of filing of
the proposed rule change, or such shorter time as designated by the
Commission. The Commission notes that Nasdaq has satisfied the five-
day pre-filing notice requirement.
\12\ For purposes only of waiving the 30-day pre-operative
period, the Commission has considered the impact of the proposed
rule change on efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
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At any time within 60 days of the filing of a rule change pursuant
to Section 19(b)(3)(A) of the Act,\13\ the Commission may summarily
abrogate the rule change if it appears to the Commission that such
action is necessary or appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes of
the Act.
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\13\ 15 U.S.C. 78s(b)(3)(A).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2007-094 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2007-094. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the Nasdaq. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2007-094 and should
be submitted on or before February 21, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-1731 Filed 1-30-08; 8:45 am]
BILLING CODE 8011-01-P